American Safety Insurance Holdings has improved its profitability by 73 percent year-on-year with first quarter net earnings of $7.09 million.

That compares to a $4.12 million profit for the same period in 2006. The company's combined ratio has also gone down from 99.5 percent to 95.6 percent over the corresponding three months.

The results give a net earning of $0.65 per diluted share compared to $0.57 in 2006.

The company said the improvement was due to increased investment income and improved underwriting results.

Stephen Crim, president and chief executive officer of American Safety Insurance, said: "Growth in many of our core business lines in addition to the efforts to diversify our product portfolio resulted in a five percent increase in gross premiums written over 2006.

"We continued to exercise underwriting discipline in the softening market, resulting in a substantial decrease in our construction premium writings in western states during the quarter.

"Net premiums written during the quarter increased by 16 percent, driven primarily by premium growth in environmental, increased retentions in specialty programmes and premium production in assumed reinsurance.

"While the impact of the soft market on our construction results will make it more difficult, we believe our product diversification strategy will provide the opportunity to achieve our previously announced growth targets for 2007."